How to earn the Chartered Financial Consultant (ChFC) designation

There’s a wide range of designations that financial advisors in Canada can earn to supplement their knowledge, experience, and expertise. Designations like Certified International Wealth Manager (CIWM), Personal Financial Planner (PFP), Chartered Financial Analyst (CFA) and many others can contribute to making advisors into more well-rounded finance professionals.

One of the many designations for financial advisors that doesn’t get much press but can provide clients with a lot of value is that of Chartered Financial Consultant or ChFC. It is only offered by the American College of Financial Services, and the ChFC designation is maintained in Canada through the Institute for Advanced Financial Education.

Is the title of Chartered Financial Consultant a good career move for financial advisors? Why should an advisor consider this designation? In this article, Wealth Professional seeks to provide answers to these and many more questions. Let’s get into it.  

What is a Chartered Financial Consultant (ChFC)?

The Chartered Financial Consultant is a professional designation that can be obtained by finance professionals. It is especially suited for experienced financial advisors due to the work experience requirement. Only the American College of Financial Services offers this designation, and it has been doing so since 1982.

ChFC is a maintained designation in Canada. Requirements are issued by The Institute for Advanced Financial Education (The Institute).

ChFC designation is ideal for finance professionals who wish to help clients with complex situations. This designation can be of great benefit for anyone in the financial industry, but can also be good for:

• accountants
• bankers
• insurance agents
• loan officers
• realtors
• stockbrokers
• tax professionals

ChFC designation represents an education revolving around financial concepts, practical experience, and examinations. Those who earn the ChFC designation are considered to have exhaustive knowledge in financial matters coupled with the ability to provide sound financial advice.

Becoming a Chartered Financial Consultant

There are certain prerequisites to becoming a ChFC. For starters, only full-time financial advisors can apply for the title. Candidates must fulfill the minimum three-year full-time financial work experience requirement before taking the courses.

The American College of Financial Services is the institution that offers the designation. Under their requirements, candidates:

• should have at least three years of full-time, relevant experience accumulated within the past five years
• should take the 8 courses issued by the American College of Financial Services, covering investment and retirement planning, insurance planning and the financial planning process
•  must pass all 8 proctored exams, taking one after each course
• must earn at least 30 credits of continuing education every two years to maintain their designation

How much does it cost to get ChFC designation?

When applying for the Chartered Financial Consultant designation, expect to pay USD5,895 for the entire 8-course program. Candidates will typically pay USD925 for each course, although some of the more specialized prices may cost more.

Prices are in USD as the ChFC designation is only available from the American College. There is a starter kit that costs USD2,495, which contains the first three courses.

Chartered Financial Consultant vs. Certified Financial Planner

In 2004, the Financial Planning Standards Council (now known as FP Canada) introduced a program that was meant to allow students and ChFC holders to become “grandfathered” into Canada’s Certified Financial Planner (CFP) designation.

While most ChFCs at that time applied for and received the CFP designation, some students did not finish their studies in time. They did not get the CFP designation.

The American CFP body permitted Canadian educational associations to offer the CFP certification if organizations like the Canadian Association of Insurance and Financial Advisors (CAIFA; now rebranded as Advocis) and CAFP desist from promoting other financial planning designations like ChFC and RFP (Registered Financial Planner).

As a result, CAIFA/Advocis decided to stop enrolling new students in the ChFC program and focus on the CFP program instead.

So, in Canada, the equivalent of a Chartered Financial Consultant designation is the CFP. Should a finance professional choose to pursue this title in Canada, the way to becoming a CFP there is by taking the course offerings of FP Canada.

Speaking of the differences between the ChFC and CFP titles, here’s a video of finance guru Michael Kitces comparing the two. He also makes an interesting proposition: should you get the ChFC instead of the CFP? Watch the video for his two cents and make your own decision.

Aspiring CFPs can also look up the educational institutions that offer pathways to CFP designation, if they lack certain requirements.

Earning ChFC certification

The path to becoming a Chartered Financial Consultant is not an easy one. The ChFC degree program is composed of 8 courses, equivalent to about 27 hours of college credits.

In these courses, students must master over 100 integrated advanced financial planning topics that will include:

• asset protection planning
• applications of comprehensive financial planning and consulting
• employee benefits planning
• estate planning
• estate tax, transfer tax, and gift tax planning
• financial planning process and environment
• income tax planning
• insurance planning
• retirement planning

The curriculum is not limited to these topics; there may be courses that tackle how rules within those topics can change in relation to other factors. Creating small business plans, assisting households going through the divorce process, and assisting families with dependants with special needs are some topics you may encounter.

Much like the standard business and finance courses in other accredited universities, all exams are proctored and closed-book.

How long will it take to become a ChFC?

The average time needed to study properly and earn the ChFC is about 450 hours or more. Study time can be a lot, since the courses cover extensive education and application training. Topics include:

• financial planning
• income taxation
• investments
• estate planning
• retirement planning

Candidates can get additional electives like macroeconomics, financial decisions for retirement, and executive compensation. The study time is apart from the minimum required work experience of three years as a full-time finance professional.

Maintenance requirements for the ChFC title

Upon graduation, new Chartered Financial Consultants must fulfill the requirements for keeping their designation. Those who have the ChFC designation are obligated to complete a minimum of 30 hours of Continuing Education (CE) in relevant courses.

ChFC Continuing Education (CE) Overview

CE must be completed every two years to maintain their designation, apart from adhering to The American College Code of Ethics and Procedures and remain a ChFC in good standing. There may be corresponding fees set by the American College for maintaining the certification as well.

Is the ChFC difficult to obtain?

According to some financial advisors who have already taken the exams and now have ChFC designation, the exams are not that difficult – if you devote sufficient time to study and review the lessons.

The advantage of the ChFC exams is that they are taken one at a time per course, instead of the CFP where you take a comprehensive, two-day exam that covers all the topics. Also, if you fail any of the tests for any reason, you can always take them again until you get a passing grade.

Is the Chartered Financial Consultant designation worth it?

The answer depends on the individual finance professional. If obtaining the title was based on financial goals alone, becoming a ChFC could well be worth it.

A salary that amounts to $70,000 or more is considered high in Canada. The average salary for a ChFC is more than $70,000 a year, so obtaining the designation in terms of earnings can be worth the effort.

There should be no question as to the monetary rewards after obtaining the ChFC title. The big question for finance professionals is whether:

• they can commit to the Continuing Education requirement
• they can adhere to the Code of Ethics
• they can hold themselves accountable and uphold the fiduciary standard

Another factor to consider is personal preference. A finance professional should appreciate and enjoy the work they’ll be doing for clients. If they are open to the idea of doing it for the long term, then the designation can also be a source of personal fulfillment.

As you can see from the career options with Chartered Financial Consultant certification, there can be no lack of job opportunities or opportunities for advancement in the role you are in now. Equipped with the skills, contacts, and expertise coupled with your work experience, this designation can also help you put up a successful firm.

The ChFC title can benefit financial advisors in many ways. An extensive network of contacts, increased marketability, skills enhancement, and more diverse work experience are only a few benefits of the title.

But as with many other certifications, this comes with certain responsibilities like adhering to a Code of Ethics, the fiduciary standard, and accruing Continuing Education (CE) credits.

Is the Chartered Financial Consultant a designation you would consider? Let us know in the comments